Today’s Key Market Drivers – 10th February 2017

trumpTrump was going to mention his tax cuts and stimulus programs eventually and when he did the US Dollar was likely going to be bought back higher.

I’ve been mentioning this for the past week. The reason why the US Dollar rallied so strongly in the lead up to Xmas is because Trump’s policies would likely drive growth and therefore the US Federal Reserve would need to put up rates at a faster pace in 2017.

The greenback fell through January as Trump fell silent on the details of his stimulus promises. So what did Trump say on Thursday to once again fire up the US Dollar? He said he will be releasing a “phenomenal tax plan in the next few weeks.”  Trump doesn’t want a higher US Dollar but he’s going to get one if the Fed raises rates 3 times and he delivers on his tax cuts and injects a massive infrastructure program as promised.

Love him or hate him he is trying to deliver on his promises and you can’t criticise a man for wanting to deliver on what he promised and what the people voted for. Or did they? Perhaps they just didn’t want Hilary, and the Don was the next best option? 🙂

Learn from what you see this morning on the USD v JPY. There was a good old-fashioned “short squeeze” post Trump’s comments on Thursday. Anyone who has been short on the US Dollar was squeezed like an orange until they exploded and with Trump promising a “phenomenal tax program” I doubt investment banks will be shorting the US Dollar with gusto anytime soon. Learn to recognise where the herd’s pain levels are, once you do you’ll begin to think more counter-intuitively, which is what you need to win big in these markets.

 

About the Author: Andrew Barnett

Andrew is a professional trader and successful investor who has a strong focus on education. He is a regular Sky News Money Channel Guest and one of Australia’s most awarded and respected financial experts, and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Director at LTG GoldRock, Andrew Barnett, guides thousands of traders around the world in the live market on a daily basis, advising them on buy and sell directions, as well as trading his own personal account. Andrew, a regular key-note speaker at trading and wealth-creation events throughout the Asia Pacific region, is an authorized representative registered with the Australian Securities and Investment Commission (ASIC).

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